Broadcast 5/1/2013 at 03:49:14 (86 Listens, 68 Downloads, 1043 Itunes)
The Rob Kall Bottom Up Radio Show Podcast
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Rob: Can you explain what the Glass Steagall Act and Derivatives are?
Glass-Steagall Act was implemented in 1934,
Derivatives over $600 trillion-- ten times GDP of the world.
Some people say it's up to $2-3 quadrillion
Some people suggest that the solution is to just ban derivatives. What effect would that have on the economy?
Some say it would bring down the economy, but Iceland did it.
If derivatives were banned, how would that change things?
You need to protect farmers-- so that kind of futures sale should remain. Synthetic bets should be banned.
How would it be better with synthetic derivatives banned?
Who did that, that derivatives are top priority in Bankruptcy?
In Bankruptcy act of 2005-- same act that prevents students from going bankrupt to evade student loans.
Can you tell us about the Public Banking Conference?
Tell us about Cyprus?
What about the Reinhart and Rogoff r esearch that was wrong, which has been used to support the austerity approach to economics?
Quantitative easing-- applying that to student debt.
How can listeners and readers help? What can they do?
How do centralization and decentralization apply to public banking and the work that you are doing?
Besides eliminating the super-priority of derivatives, here are some other ways to block the Wall Street asset grab:
(1) Restore the Glass-Steagall Act separating depository banking from investment banking. Support Marcy Kaptur's H.R. 129.
(2) Break up the giant derivatives banks. Support Bernie Sanders' "too big to jail" legislation.
(3) Alternatively, nationalize the TBTFs, as advised in the New York Times by Gar Alperovitz. If taxpayer bailouts to save the TBTFs are unacceptable, depositor bailouts are even more unacceptable.
(4) Make derivatives illegal, as they were between 1936 and 1982 under the Commodities Exchange Act. They can be unwound by simply netting them out, declaring them null and void. As noted by Paul Craig Roberts, "the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system."
(5) Support the Harkin-Whitehouse bill to impose a financial transactions tax on Wall Street trading. Among other uses, a tax on all trades might supplement the FDIC insurance fund to cover another derivatives disaster.
(5) Establish postal savings banks as government-guaranteed depositories for individual savings. Many countries have public savings banks, which became particularly popular after savings in private banks were wiped out in the banking crisis of the late 1990s.
(6) Establish publicly-owned banks to be depositories of public monies, following the lead of North Dakota, the only state to completely escape the 2008 banking crisis. North Dakota does not keep its revenues in Wall Street banks but deposits them in the state-owned Bank of North Dakota by law. The bank has a mandate to serve the public, and it does not gamble in derivatives.
A motivated state legislature could set up a publicly-owned bank very quickly. Having its own bank would allow the state to protect both its own revenues and those of its citizens while generating the credit needed to support local business and restore prosperity to Main Street.
For more information on the public bank option, see here. Learn more at the Public Banking Institute conference June 2-4 in San Rafael, California, featuring Matt Taibbi, Birgitta Jonsdottir , Gar Alperovitz and others.
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